The claims ratio in the health insurance segment has returned to pre-pandemic levels, according to data from the Insurance Regulatory and Development Authority of India’s (Irdai) annual report for 2022-23. The net incurred claims ratio for health insurance business decreased to 89% in FY23, compared to 109% and 94% in FY21. This signifies a substantial drop from the peak of the Covid-19 pandemic.
Death claims from life insurance also witnessed a significant reduction, decreasing by 32% to Rs 41,457 crore in FY23 from Rs 60,822 crore in FY22.
Breaking down the data, the net incurred claims ratio for public sector health insurers declined from 126% in FY22 to 105% in FY23. Similarly, for private sector health insurers, it dropped from 105% to 87%, and for standalone health insurers, there was a sharp decline from 81% to 62% during the same period.
Examining specific segments, the net incurred claims ratio for individual health businesses fell to 76% in FY23 from 96% in FY22. For group business, it decreased from 119% to 96% during the corresponding period.
Despite these shifts, the gross direct premium for non-life insurers within India experienced a robust growth of 16.4%, reaching Rs 2.6 trillion in FY23 compared to Rs 2.2 trillion in FY22. Premium underwritten from Health (including personal accident) increased by 21% year-on-year to Rs 97,664 crore in FY23 from Rs 80,502 crore in FY22.
The health segment now constitutes 38% of the total premium of general insurers, with five states—Maharashtra, Karnataka, Tamil Nadu, Gujarat, and Delhi—contributing approximately 64% of the total health insurance premiums in FY23.
During FY23, general and health insurers disbursed Rs 70,930 crore for 23.6 million health insurance claims, with an average payment of Rs 30,087 per claim. Two-thirds of the claims were settled through Third Party Administrators (TPAs), while the remaining were settled through in-house mechanisms.
The annual report, citing data from the Swiss Re Sigma Report, highlights a decrease in India’s overall insurance penetration to 4% in 2022-23 from 4.2% in FY22. Life insurance penetration dropped to 3% from 3.2% during the same period, while general insurers’ penetration remained stagnant at 1%.
